Week 3 ANNUITY

Question 1

A sequence of equal payments made at equal periods
of time is called

Answer 1

Annuity

Question 2

The time between payments
is called

Answer 2

Payment Period

Question 3

The time from the beginning of the first payment
period to the end of the last period is called

Answer 3

term of annuity

Question 4

function/usage of annuities

Answer 4

-To accumalate funds
▪︎when you make regular deposits in a savings account

-To pay out funds
▪︎when you receive regular payments from a pension plan.

Question 5

where payments are made at the end of
each period and the frequency of the payments is the
same as the frequency of compounding interest.

Answer 5

simple annuity

Question 6

i

Answer 6

interestrate per period

i =r/k

Question 7

n

Answer 7

number of periods

n = t(k)

Question 8

Formula of Annuity if FUTURE WORTH is needed

Answer 8

-n
F = A[(1-(1+i) ]
————-
i

Question 9

P(annuity)

Answer 9

PRESENT VALUE

Question 10

F(annuity)

Answer 10

FUTURE VALUE